By law, professionals are required to perform the services for which they were hired in accordance with the terms of contract. While the first duty is primarily contractual, the second arises from the principle of tort law.

A contractual arrangement is created, when a client hires a professional to perform a service. When he fails to perform the contractual obligations as promised and the client suffers harm as a result, the injured party is entitled to be restored to the position he would have occupied had the contract been performed as promised.

Risks covered

For physicians and medical establishments, the policy covers all legal liability claims arising out of bodily injury and/or death of any patient caused by error, omission or negligence in professional services rendered by the insured or qualified assistants employed by the insured and whose names are declared under the policy

Compensation Offered

This policy promises to pay all sums (subject to indemnity) which the insured becomes legally liable to pay as damages to their customer in respect of errors and/or omissions while rendering professional services arising out of claims first made in writing against the insured during the policy period.

The indemnity also includes the legal costs and expenses besides the compensation claim. Yet, the legal costs and expenses incurred are subject to prior consent of the insured and the limit of indemnity.

Exclusions

Under the Professional Indemnity Insurance Policy for Doctors and Medical Practitioners, the insurance company is not liable in respect of

Any criminal act or any act committed in violation of any law or ordinance.
Services rendered while under the influence of intoxicants or narcotics.
The performance of general anaesthesia or any procedure carried out under general anaesthesia by dentists and dental surgeons, unless performed in a Hospital.
The use of drugs in weight reduction.
Claims made against the Insured arising from the performance of cosmetic plastic surgery, hair transplants, punch grafts, flap rotations, etc.
Any third party public liability.
Claims arising from any condition directly or indirectly caused by or associated with Human T-Cell Lymphotrophic Virus Type III (HTLV III) or Lymphadenopathy Associated Virus (LAV) or the mutant derivatives or variation thereof or in any way related to Acquired Immune Deficiency Syndrome or any similar syndrome.

The policy also does not cover liability

Assumed by the Insured by agreement.
Arising out of willful or intentional non compliance of any statutory provision.
Arising out of loss of purely financial nature like loss of goodwill, loss of market, etc.
Arising out of fines, penalties, punitive or exemplary damages.
Arising out of war and nuclear risks.

Arising out of genetic injuries caused by X-ray treatment/ diagnosis or treatment/ diagnosis with radioactive substances

This policy is offered by:

National Insurance Company Ltd. (NIC)
The Oriental Insurance Company Ltd. (OIC)
United India Insurance Company Ltd. (UIIC)
The New India Assurance Company Ltd. (NIAC)

Errors omissions insurance

Errors Omissions insurance protects businesses from loss due to lawsuits filed by dissatisfied clients. Errors Omissions insurance protects your company from claims if your client holds you responsible for errors, or the failure of your work to perform as promised in your contract.

Any professional can never fully escape the possibility that their work may fail to meet their clients' expectations. Today, the public and our legal system expect more and are much more inclined to initiate a lawsuit. Errors Omissions insurance should be an essential part of your insurance portfolio. Not having Errors Omissions insurance ( E&O ) is taking a serious risk

Errors Omissions insurance coverage includes legal defense costs - no matter how baseless the allegations. Errors Omissions insurance insurance will pay for any resulting judgments against you, including court costs, up to the coverage limits on your policy.

“THIRD PARTY ADMINISTRATORS” (TPA)

Payments for private hospital treatment in our country, is made in most of cases directly by patients from his pocket. In 1986 Medicliam- a health insurance policy was introduced where the payment made by the patients for hospitalization can be reimbursed. However after more than 16 years, there are only 34 lakhs Mediclaim policies covering 80 lakhs people. One of the factors to make this target achievable was to make the policies “patients friendly.” Introduction of the third party administrators is considered to be the first step in this direction. Translated in the lay term it means “cashless policy” where in a policy holder after his treatment does not have to pay any bills, which are taken care of by these TPA. For the patients or the policy holders it is a dream come true. Of course, he will be paying 6% extra on his premium for this facility.

d How the system works

As per this provision each regional office of the insuring company will appoint TPAs and allot the policies they are supposed to take care. TPAs will enlist the hospitals and nursing homes who are willing to participate and treat the patients without collecting their bills from them. TPAs would send the cashless hospital treatment and a list of the institutions which he could utilise for the same.

A TPA will have a 24 hrs helpline and tollfree line for patient's and healthcare provider's perusal. TPA will monitor the entire procedure with the hospital authorities while the patient is in the hospital. TPA should not interfere with the line of treatment. When all the relevant facts necessary for appraisal of the case is submitted by the nursing homes, approval should be given within a day or two, as TPA would have the data of the enlisted nursing home computerized. On receipt of the bills from claim float account which is separate account maintained by the TPA. The insuring company will give money to the TPA to start this account which will be used only to settle the medical bills claim of the nursing homes. TPA can claim and credit the amount in this account when it is reimbursed by the insuring company. 6% of the premium will be paid to TPAs for their services.

d TPA focus

Besides providing cashless service for the patient TPAs have to focus on the following aspects.

Reduce claim cost as well as claim ratio for the insurer.
Utilisation review and control of decision about health services provided prospectively or retrospectively.
To obtain second surgical / specialist opinion if necessary before issuance of authorization during the time of hospitalization.
Providing list of service providers and their charges to the insurer.
Will negotiate the charges and bulk discounts with the providers; discounts will be passed on to the insurer.
Arrange for gradation of the hospital depending upon the infrastructure, type of treatment available, quality and cost of treatment.
To follow ICD 10 for codification of data. In future this data will be utilized for pricing and product differentiation.

d Managed Health Care

Managed health care which is prevalent in developed countries is beginning to make inroads in our country. It is an organized system of medical care that integrates financing and delivery of appropriate healthcare and measures performance. It manages both utilization of care and cost of services provided, its goal is a system that delivers value by giving access to quality cost effective care. Introduction of TPAs is a step in that direction. Besides the functions of TPAs as already seen, managed health care will having following benefits.

Reduce unnecessary treatment
Prepayment and other payment schemes may improve healthcare delivery
In order to control costs managed healthcare organization will promote preventive care such as medical check ups, immunization and others.

Apart from initial deficiency in administration inherent to any new system introduced, following points need consideration by all concerned in healthcare delivery.